Category
Finance
Mortgage Affordability Calculator
Estimate the maximum home price you can afford using income, debts, and housing costs
Estimated time
2 min
Enter Affordability Inputs
Estimate the maximum home price you can afford based on income, debts, and housing cost assumptions.
$
Debt Input Mode
Choose whether to enter debts as dollar payments or as a percent of gross monthly income. Include required monthly debt payments like car loans, student loans, and credit cards. Exclude rent and housing costs.
$
Percent of gross monthly income already used by non-housing debts. Enter 12 for 12%.
%
DTI means debt-to-income ratio. This sets the maximum share of gross monthly income allowed for total debt payments.
%
Cash you plan to put down when buying. This amount is subtracted from the home price to estimate loan size.
$
Estimated annual mortgage rate (APR) for the loan scenario you want to test.
%
Length of the mortgage in years used for the affordability estimate.
years
Annual property tax as a percent of home value. Enter 1.2 for a 1.2% yearly estimate.
% / year
Annual homeowners insurance as a percent of home value. Enter your best yearly estimate.
% / year
Monthly homeowner association dues added to your housing payment estimate.
$
Annual PMI rate as a percent of the loan amount. Many loans fall around 0.3% to 1.5%.
% / year
Affordability Planning Tips
- Target DTI is a planning guardrail, not a lender guarantee.
- Property tax and insurance assumptions can materially shift your budget.
- HOA and PMI can reduce purchasing power even when rates look competitive.
How Affordability Is Calculated
The calculator first determines your monthly housing budget from gross income, monthly debts, and target DTI. It then solves for the highest home price that keeps estimated monthly housing cost within that budget.
Housing Budget = (Income / 12 * Target DTI) - Monthly Debts; Monthly Housing = P&I + Taxes + Insurance + HOA + PMI
Income- gross annual household income
Target DTI- maximum debt-to-income ratio used for affordability
Monthly Debts- non-housing debt obligations or debt ratio converted to dollars
P&I- monthly principal and interest payment on the mortgage loan
Taxes / Insurance- monthly estimates based on annual percentages of home price
HOA / PMI- optional monthly HOA dues and PMI estimate
- Default target DTI is 36% and can be adjusted.
- Default property tax and insurance assumptions are 1.20% and 0.35% of home price annually.
- PMI is optional and defaults to 0.60% of loan amount annually when enabled.
- Results are planning estimates and exclude lender-specific reserves, closing costs, and underwriting rules.
Default Assumptions
- Target DTI threshold default: 36.0%
- Property tax default: 1.20% of home price per year
- Home insurance default: 0.35% of home price per year
- PMI default when enabled: 0.60% of loan amount per year
Example Scenarios
Conservative debt load
$110,000 income, $1,400 monthly debts, 36% target DTI
Affordability is constrained more by debt obligations than down payment.
Lower debts, stronger down payment
$140,000 income, $700 monthly debts, $90,000 down
Higher buying power from lower recurring debt and larger cash down.
Condo with HOA and PMI enabled
$95,000 income, HOA $350, PMI 0.6%, 10% down
Optional housing costs reduce the maximum affordable home price.
Frequently Asked Questions
Is this a mortgage pre-approval?
No. Lenders still evaluate credit profile, assets, reserves, and underwriting overlays.
Should I use monthly debts or debt-to-income %?
Use whichever is easier. Debt % is converted to dollars using your gross monthly income.
Why do tax and insurance assumptions matter so much?
They scale with home price and directly reduce how much principal and interest you can afford.
When should PMI be enabled?
Enable PMI when you expect less than 20% equity at purchase and want the estimate to include that cost.
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